Mahindra Finance Q2 net profit rises 45% to ₹564 crore on robust lending

Strong tractor financing, healthy SME growth, and stable asset quality boost Mahindra Finance's second-quarter performance in FY26

Mahindra and Mahindra Financial Services reported a 45 per cent year-on-year (Y-o-Y) rise in its net profit to ₹564 crore in the second quarter of FY26 (Q2FY26), up from ₹389 crore in the same period a year ago.

 

Net interest income increased 14.6 per cent Y-o-Y to ₹2,279 crore from ₹1,988 crore in Q2FY25. Shares of Mahindra & Mahindra Financial Services closed 0.25 per cent higher at ₹299.70 apiece on the BSE.

 

Loan book and disbursements

 

The company’s loan book expanded 13 per cent Y-o-Y, while total disbursements grew 3 per cent to ₹13,514 crore. Tractor disbursements, however, surged 41 per cent Y-o-Y, reflecting robust performance in this segment.

 

The non-bank lender’s asset quality remained within the guided range, with Stage 3 (GS3) loans at 3.9 per cent and Stage 2 plus Stage 3 (GS2+GS3) at 9.7 per cent. The credit cost for the quarter ended September 30, 2025, stood at 2.2 per cent.

 

Capital and asset quality

 

Capital adequacy remained healthy at 19.5 per cent, with Tier-1 capital at 16.9 per cent. Provision coverage on Stage 3 loans stood at 53 per cent, while the total liquidity buffer was approximately ₹8,572 crore. Collection efficiency remained steady at 96 per cent, unchanged from Q2FY25.

 

Core and emerging business performance

 

In its core wheels business, Mahindra Finance retained leadership in tractor financing and remained one of the leading non-banking financial companies (NBFCs) in financing passenger vehicles, light commercial vehicles, small commercial vehicles, tractors, and used passenger vehicles.

 

The company continues to broaden its footprint in small and medium enterprise (SME) lending, vehicle leasing through Quiklyz, and fee-based income streams from insurance and investment products. These efforts are supported by strong investments in technology, analytics, and distribution channels.

 

The non-vehicle finance portfolio recorded a 33 per cent Y-o-Y increase, further diversifying the company’s asset mix.

 

SME lending segment

 

In the SME space, Mahindra Finance focused on micro and small enterprises, with its loan book rising 34 per cent Y-o-Y to ₹6,911 crore as of September 30, 2025. Growth was largely supported by secured products such as loans against property (LAP). Asset quality remained strong, with Stage 3 assets at 1.4 per cent at the end of the quarter.